CITY HALL — Aldermen threatened Tuesday that Mayor Rahm Emanuel's proposed new rules on short-term rentals like Airbnb would lead to "proliferation" of the units and dramatically alter neighborhoods.
Several aldermen questioned how the city would enforce the rules on vacation rentals, and bristled at the "administrative review process" allowing Business Affairs Commissioner Maria Guerra Lapacek to override the law and grant additional units to be rented basically by fiat.
A joint committee considering the matter recessed after five hours, and a vote on the highly contentious issue was put off until just ahead of Wednesday's City Council meeting.
Lincoln Park Ald. Michele Smith (43rd) called proliferation "the issue of the day" and said short-term rentals "contribute to a housing shortage in my area." Smith charged there were 600 Airbnb rentals in Lincoln Park, "less than half" owner-occupied.
Smith granted "significant changes" were made in an 11th-hour proposal the Emanuel administration submitted to aldermen before a joint meeting of the Housing and License committees Tuesday.
That included limiting short-term rentals to one unit in a two- or four-flat, and six units in a high-rise. What's more, a single-family residence could be rented, but only if the primary owner remained on the premises.
Rentals through Airbnb, which handles the entire transaction, would be registered by that company with the city. Others using advertising services like HomeAway and VRBO would need to obtain a "vacation-rental license" from the city. Business interests renting properties they don't reside in would need an "operator's license."
Yet Smith lashed out at an "administrative review process" that would allow the commissioner of the Department of Business Affairs and Consumer Protection to grant more rentals on an individual basis, even if they violated those provisions.
"This guts this ordinance," Smith said. "We cannot exercise veto control."
"It could be exploited as a loophole," added Downtown Ald. Brendan Reilly (42nd).
"I don't like this. I think we lose control," said Lakeview Ald. Tom Tunney (44th). Suggesting that the "administrative review process" could be appealed as well, Tunney said, "It sets us all up for a day in court."
Smith said the ordinance would "hollow out neighborhoods" and drew parallels with the proliferation of Airbnb rentals in New Orleans.
Ald. John Arena (45th) questioned what he called "vague controls on proliferation" and wondered who would check up on whether an owner was on the premises for the rental of a single-family home.
"Who is going to enforce this?" Ald. Susan Sadlowski Garza (10th) said.
"I'm a little skeptical," said Ald. Scott Waguespack (32nd). "It's hard enough to get you guys to enforce the rules we have on the books."
Reilly too insisted the city had not enforced the 2011 vacation-rental ordinance he'd passed and questioned how Business Affairs could police thousands of units on an additional pair of investigators paid through its $160,000 share of the estimated $2 million the ordinance would raise.
"Neighbors will suffer Friday night through Monday morning," Reilly said, and police would get "caught holding the bag" with weekend violations involving parties and the like.
"An ordinance is only as good as the enforcement behind it," Reilly said, accusing Airbnb of "hiding this football for years."
"Our hotel industry has been totally frustrated with the lack of enforcement," testified Marc Gordon, head of the Illinois Hotel Association.
Emanuel's latest proposal dropped a provision that would have set limits on the number of days a property can be rented, or else compel that property to be licensed. Ald. George Cardenas (12th) called for those limits to be reinstated.
"Every community group in my ward" wants stronger regulations, Smith said, adding she would "beg my fellow aldermen to help me protect my neighborhood." She called on aldermen to "take more time to consider this."
Arena agreed. "I think we have work to do here," he said. "There are things in here that have to be worked out." Arena added, "It feels a little like we're building the car while we're driving it."
"We need to delay this until the ordinance gets correct," said Ray Reiss, of the Chicago Bed and Breakfast Association.
Allan Mellis of Wrightwood Neighbors said it was clear the issue was so complex it needed more time to be considered and made right.
"We are committed to work with the city," said Airbnb spokeswoman Jillian Irvin. "We also want to protect the quality of life in Chicago neighborhoods."
Yet Irvin said Airbnb did not support the latest version of the ordinance, calling it needlessly complicated. Pressed by Reilly, she admitted the company was no more likely to obey the law if passed than it does the current law.
Reilly also raised doubts on how trustworthy Airbnb would be in self-reporting its properties.
Many Airbnb renters testified they were good neighbors and drew visitors to neighborhoods like Little Village and helped them patronize local restaurants and merchants. Other residents, however, complained about unsupervised parties at Airbnb rentals including underage drinking.
Ald. Joe Moore (49th), chairman of the Housing Committee, suggested at one point that short-term rentals could revitalize downtrodden neighborhoods with "boarded-up windows." Irvin insisted Airbnb rentals were growing most rapidly on the South and West sides.
Tanya Petty confirmed that, saying Airbnb had allowed her to rent an extra room in her Garfield Park home and pay for the care of her mother.
Yet concerned citizen George Blakemore was doubtful. "I don't think a lot of tourism is coming over to Englewood," he said. "I don't think anybody's trying to go to Roseland."
Homeless advocates lauded how most of the $2 million raised would go to provide housing.
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